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Obama Administration Announces Biofuels Initiatives

President Obama Tuesday announced steps to increase the use of biofuels -- but traditional soy-based diesel would be limited in an EPA proposal.

Obama signed a Presidential Directive establishing a Biofuels Interagency Working Group, announced additional Recovery Act funds for renewable fuel projects, and announced his administration's Notice of a Proposed Rulemaking on the Renewable Fuel Standard.

The U.S. Environmental Protection Agency proposal outlines the EPA's strategy for increasing the supply of renewable fuels, poised to reach 36 billion gallons by 2022, as mandated by the Energy Independence and Security Act of 2007.

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Increasing renewable fuels will reduce dependence of foreign oil by more than 297 million barrels a year and reduce greenhouse gas emissions by an average of 160 million tons a year when fully phased in by 2022. EISA will establish four categories of renewable fuels. The new categories include:· cellulosic biofuels; · biomass-based diesel;· advanced biofuels; and· total renewable fuel.

In 2022, the proposal would require 36 billion gallons annually of renewable fuels, of which 16 billion gallons must be cellulosic biofuels; and 1 billion gallons must be of biomass-based diesel.

At most, 15 billion gallons of the renewable fuel mandate can be met with conventional biofuels, including corn-based ethanol and soy-based biodiesel.

For the first time, some renewable fuels must achieve greenhouse gas emission reductions compared to the gasoline and diesel fuels they displace. Refiners must meet the requirements to receive credit toward meeting the new standards.

The National Biodiesel Board issued a statement saying while it had not yet reviewed the proposed rule in detail, "It appears that the EPA, in determining the greenhouse gas profile for biodiesel, is penalizing the U.S. biodiesel industry for land use decisions made outside the U.S. that have little if anything to do with the domestic biodiesel production," said Manning Feraci, the NBB's vice president of federal affairs. "A final rule that is based on questionable science and is structured in a manner that restricts the role of sustainable vegetable oils in the program will make it nearly impossible to meet the Advanced Biofuels goals established by statute."